Analyzing the economic potential for DG CHP systems at the University of Guelph

Economic modeling of distributed generation (DG) systems has become an important area of research with the modern push towards greener and more sustainable electricity generation practices as any proposal without a solid business case is bound to flounder with the state of the global economy. This paper assessed the state-of-the-art in DG economic modeling and based on this developed a model to determine the economic suitability of DG projects in Ontario, Canada. This model was applied to the energy profile of the University of Guelph in Guelph, Ontario and it was found that using 2× 5MW biomass combined heat and power (CHP) DGs and selling electricity to the grid will save them $2.56 million annually on energy costs. This paper recommends that further research is done in optimizing between local distribution companies (LDCs) and DG operator economic benefits of DGs, applying risk and uncertainty to economic modeling, analyzing the cost of biomass pellets in Ontario, and doing hour-by-hour modeling of the University of Guelph´s energy usage to verify the findings of this paper.